S&P cuts India’s growth forecast

Ratings agency Standard & Poor's has lowered its growth forecast for the Indian economy to 5.5 per cent from 6.5 per cent for the year ending March 31, despite recent moves to attract capital by opening the aviation and retail sectors to greater foreign investment.

According to MoneyControl.com, S&P has cut its outlook on India's sovereign rating of BBB- to negative from stable in April, while it has also lowered its growth forecast for China to 7.5 per cent.

Prime Minister Manmohan Singh looks poised to take further measures to boost the economy, however, the Times of India reports.

Following moves to allow foreign airlines to invest up to 49 per cent in local ventures and to allow multi-brand retailers like Walmart to invest up to 51 per cent in local stores, Singh is readying a plan to loosen banking restrictions to allow banks to loan more money to real estate firms – in a bid to boost the employment-generating construction sector.

Educational loans are also reportedly going to get easier, the paper said.

Meanwhile, the government is likely to announce an increase in the cap on foreign investment in the insurance sector to allow foreign players to buy up to 49 per cent in local ventures, rather than the current limit of 26 per cent, Zee News reports.